Abstract

The 1970s saw growing assertions that state intervention was failing and that the state itself was in crisis. In the 1980s the dominant neo-liberal response in Britain to this alleged crisis largely involved turning to the market and, to a lesser extent, community or family self-help. Successive Thatcher and Major governments promoted privatization, liberalization, de-regulation, the use of market proxies in the residual state sector, cuts in direct taxes to enhance consumer choice, and internationalization to promote capital mobility and the transfer of technology and 'know-how'. They also advocated an enterprise culture and popular capitalism to make civil society more market-friendly. This project was intended to re-equip Britain with a liberal, night-watchman state with progressively smaller and more balanced budgets and thereby boost this slimmed-down state's capacity to perform its remaining core functions. However, while this neo-liberal programme was still being pursued and, indeed, intensified, it also became apparent that the turn to the market had not delivered all that had been promised. Market failures and inadequacies had not been eliminated yet an explicit return to the state was ideologically and politically unacceptable. Thus, as early as the 1980s, one could discern increasing government interest at all levels in how public-private partnerships and similar forms of governance might contribute to public policy and purposes. This alternative to marketization was steadily reinforced during the Conservative years and is likely to become yet stronger under 'New Labour' with its declared commitment to a 'stakeholding society'. The expansion of governance is not meant to return Britain to a discredited corporatism (let alone a tripartite corporatism with the active involvement of organized labour) but, rather, to address real limitations of the market, state, and mixed economy as means of dealing with various complex economic, political, and social issues. One area where a turn to governance has been popular is local economic and social development and it is this that provides the empirical focus of the following theoretical reflections on the various ways in which coordination mechanisms can fail and how tendencies to failure may themselves be governed.